Dear Littler: We are a multi-state employer with operations in multiple technology hubs, including Silicon Valley and Austin. Over the past several months we have heard from multiple applicants and employees about whether the company offers cryptocurrency as an option for compensation. While I am generally aware of what cryptocurrency is, I do not have enough understanding to make an informed decision. Is paying cryptocurrency as a component of compensation an option?
—Confused on Crypto
Dear Confused on Crypto,
While cryptocurrency has been around since at least 2009, it has become more mainstream recently and you are seeing that widespread recognition with your applicants and employees. For the uninitiated, cryptocurrency is a digital peer-to-peer payment system secured and verified through private codes housed on an encrypted public ledger called blockchain, without the use of banks or any other financial institute. We are seeing an uptick in questions from employers about using cryptocurrency as a signifier in a competitive labor market. While there are mayors,1 professional athletes,2 and at least one country3 that are embracing cryptocurrency, we recommend a cautious approach to using cryptocurrency as wages for your employees.
The paramount question is whether it is legal to pay wages to employees in the form of cryptocurrency. Under federal law (Fair Labor Standards Act), wages must be paid “in cash or negotiable instrument payable at par.” 29 C.F.R. §531.27....
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